Africa Uganda Copper Mining Business Opporttunity

Africa Uganda Copper Mining Business Opportunity

In response the Government of Uganda request for Confirmation of Interest in taking over the operations of one of Uganda's largest Copper mine, Kilembe Mines Limited, Africa Uganda Business Travel Guide is organizing a consortium that will participate in the bidding process.

Read the media advert below issued 01 November 2012 and contact us if you want to be part of the consortium being organized by Africa Uganda Business Travel Guide.Com

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Kilembe Mines Limited (KML) is a company Incorporated under the Company Act of Uganda and its shares are 99.06% owned by the Government of Uganda (GOU). KML operated a copper mine in Kasese (Western Uganda) and a copper smelting plant in Jinja (Eastern Uganda) from 1956 to 1982 when mining activities ceased.

Since then, the company and its assets have been operated on a care and maintenance basis. The assets of the company include but are not limited to Land and Buildings, minerals and mining rights, plant and machinery, timber treatment plant, mining plant, foundry and electrical workshops, a hydro electric power plant and several tailings ponds (with the potential for reprocessing for their cobalt content).

With the increase in demand for copper worldwide, the Government of Uganda, in exercise of its mandate under the Public Enterprise and Reform Divestiture Act Cap. 8 of the Laws of Uganda, 2000 wishes to implement the divestiture of KML through a Public Private Partnership (PPP) and select the private partner through a competitive bidding process which will be preceded by this Request for Confirmation of Interest (RCOI) , by which respondents will be preliminarily evaluated and selected to participate in the subsequent Request for Qualification (RFQ) and or Request for Proposal (RFP) stage.

DLA Piper LLP, as leader of the transaction advisory team comprising DLA Piper,LLP, Deloitte & Touché, Mott MacDonald, Bageine & Company , Sebalu & Lule Advocates and Alexander Kwatampora (the "TA") has been engaged by the Government of Uganda to provide advisory services in the divestiture of Kilembe Mines Limited. The TA on behalf of Government of Uganda now invites eligible companies to confirm interest in the required services. Companies interested in participating in the tender process, must provide information indicating that they meet the requirements below (brochures, description of similar assignments, experience in similar conditions, availability of appropriate skill sets among staff, etc)

Companies or Consortia who previously expressed interest to Government of Uganda are encouraged to respond to this RCOI.

The successful company subsequent to RFP evaluations, will enter into a concession agreement with the Government of Uganda , take over the rehabilitation of assets , resuscitate the Kilembe mining operations and commit to exploring for potential further deposits within the concession precinct on an ongoing basis. The short listing requirements include:

A demonstration of their ability to finance or obtain financing for the investment required such as audited accounts, tax certificates, statements of source of funding and levels of levels of Debt to Equity. Technical expertise should be demonstrated with regard to design, construction, exploration and operation of mining plants that optimize underlying mineral resources. Relevant experience if any should also be identified.

Applicants should demonstrate experience in the operation and/or revitalization of similar mines as well as the ability to secure funding for development of the company assets.

Applicants should demonstrate their capacity and experience to ensure good environmental and social management, and should have no environmental or social regulatory infractions that have led to suspension/revocation of an exploration license over the past 5 years.

Applicants may be required to undertake the rehabilitation of the Mobuku I Hydro power plant which has an average output of 4MW and supplies power to the mines and surrounding areas. Applicants should therefore demonstrate technical competence with regard to similar hydro power schemes if any.

As Value for Money and Affordability coupled with Risk Transfer is paramount in Public Private Partnerships (PPPs) , it is crucial that any potential Applicant applies innovative thinking to propose bankable ideas. To this end, significant importance will be placed on the financing and the terms offered to Government of Uganda.

While the Government of Uganda's current preference is for a PPP arrangement that is structured in form of a concession with an initial goodwill payment upon financial closing and a sliding scale royalty payment, applicants are encouraged to comment on the Government of Uganda's preferred structure and to propose other suitable structures for the PPP arrangement together with mechanisms for revenue sharing between themselves and the Government of Uganda.

Expression of interest in English ( One original and 3 copies as well as one compact disc (electronic copy in CD)) must be delivered no later than 17:00hrs on 30th November 2012.

About Cooper and Cobalt in UgandaCopper has been found at several localities in Uganda but the only significant deposit discovered to-date has been at Kilembe, where copper-cobalt sulphide mineralization occurs. The other areas where copper mineralization has been noted are Bobong in Karamoja region and Kampono and Kitaka in Mbarara district. Copper is also reported in Buhweju, Bushenyi district.

Although copper was first reported at Kilembe in 1908, the deposit was not brought into production until 1956 on completion of the railway line to Kasese. Between 1957 and 1979 a total of 16.29 million tons ore averaging 1.95% Cu and 0.18% Co were mined and treated to yield 217,000 tons of blister copper which was exported, plus 1.1 million tons of cobaltiferous pyrite (iron sulphide) which was stockpiled. The Kasese Cobalt Company has installed a 1,000-ton per year cobalt plant and is processing the stockpile of pyrite concentrates.

The Kilembe mine ceased its production in 1982 and has since been on care and maintenance. Proven reserves of copper at closure were 4.17 million tons with a copper content of 1.77%, with opportunities to discover additional resources in the vicinity of the mine. In addition to copper still in the ground, there is 5.5 million tons of cobalt in tailings (dumped material from previous mining) at an average grade 0.114% Co.

Uses: Copper is mainly used in making electrical conductors. Cobalt is used in making special alloys for the aerospace industry, electronics and high-tech industry. Cobalt salts are used in the chemical industry and in tinting glass to give a blue colour.